Nvidia’s (NVDA) operating momentum and share price rally have been absolutely unstoppable, as chip demand continues to outpace supply, all while the company is signing major deals left and right. On Thursday last week, for instance, Microsoft (MSFT) rolled out a massive new Azure cluster built on Nvidia’s latest silicon to power OpenAI-class workloads.
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Meanwhile, everyone from hyperscalers to governments is racing to lock in supply. With estimates marching up and margins holding stout, I’m staying Bullish, and I can see a path to $250 sooner than the skeptics think.
Azure’s GB300 Moment
Microsoft’s Azure just announced it has delivered the first large-scale cluster using Nvidia’s GB300 NVL72 systems, expressly built for OpenAI-grade training and inference. Think of it as an “AI factory” purpose-built for next-gen models, including dense racks of Grace-Blackwell Ultra compute stitched together with Nvidia’s fastest networking. Hence, the whole thing behaves like one giant accelerator.
Microsoft framed it as the first of many, and Nvidia’s own write-up calls it a platform for “next-generation AI model development and deployment.” In a market where investors are constantly looking for clear signals about where the real production dollars are going, this is great news, and specifically, for Nvidia, whose pace of innovation in the space is hard to really grasp.
To me, this news shows that hyperscalers are choosing the kit they trust to scale frontier models. Azure already previewed ND GB200 v6 VMs, and now it’s skipping ahead to GB300 for OpenAI-class work. That progression reinforces Nvidia’s end-to-end moat at precisely the tier of compute with the fattest budgets. And yes, rivals are coming, with AMD (AMD) continuing to push its MI300/MI355X roadmap, but the first “largest of the large” cluster Azure is trumpeting is Nvidia.
Governments, Musk, And Fresh Capital
Beyond Azure, there are some other noteworthy catalysts powering NVDA’s rally lately. First, Washington just granted Nvidia licenses to export billions of dollars’ worth of AI chips to the United Arab Emirates under a bilateral AI agreement. Initial permits reportedly exclude G42 for now, but the framework sees as many as 500,000 high-end chips a year flowing to the UAE. That’s a staggering potential pull on supply over multiple years, and another validation of sovereign demand for Nvidia’s stack.
Remember that Saudi orders are lining up, too. Earlier this year, AP reported Nvidia will ship cutting-edge Blackwell processors into a 500-megawatt data center buildout there, again underscoring how national-scale buyers are chasing Nvidia capacity.
Then there’s the Elon Musk factor. We recently saw reports that xAI is raising up to $20 billion with a structure that includes an SPV designed to buy Nvidia processors and lease them to xAI. Nvidia is to invest up to $2 billion in the equity portion. Whether you love or loathe Musk’s timelines, this deal is undoubtedly going to benefit NVDA because it translates to future chip demand with financing attached.
Consensus Keeps Chasing Nvidia’s Growth Curve
To grasp how quickly this race is accelerating, look no further than the consensus estimates. For FY26, Street revenue sits near $206 billion (+58% YoY), rising to $275 billion in FY27 (+33%), $324 billion in FY28 (+18%), $354 billion in FY29 (+9%), and $378 billion in FY30 (+7%).
Earnings tell the same story of steady momentum: EPS is projected to climb from $4.50 in FY26 to $6.37 in FY27, $7.55 in FY28, $8.10 in FY29, and $8.92 by FY30. Over just the past three to six months, those revenue lines have been revised higher by roughly +7% to +12% for FY27–FY30—led by FY29, which has surged +16.5% in three months and +27.3% in six. With Nvidia continuing to announce major deals, analysts are steadily ratcheting up expectations for both revenue and profitability.
Also, note that Nvidia has a habit of exceeding expectations. In August, the company topped revenue and EPS again, with gross margins north of 72%, a tidy proxy for pricing power in a seller’s market. When margins look like that and the order book keeps getting refilled with Azure-, UAE-, and xAI-scale projects, the probability that actuals come in ahead of today’s consensus remains high. The last time the firm fell short of consensus was Q3 2023.
Why Nvidia’s ‘Rich’ Valuation is Cheaper Than it Looks
With respect to valuation, based on current FY26 projections, NVDA’s forward P/E is in the low-40s. But let the clock run, and those same consensus curves show multiples stepping down toward the low-20s by FY30, simply because earnings compound faster than price. And, again, I believe that these multiples could compress even faster as NVDA will likely beat estimates through its strategy of expanding capacity, shipping the next platform (like from Hopper to Blackwell to Blackwell Ultra/GB300), harvesting software and networking attach, and growing into the sticker.
The new Azure cluster suggests that the pace isn’t slowing. If anything, it’s accelerating at the highest end of demand. Thus, a multiple expansion from here to where NVDA trades close to $250 (under 40x next year’s projected earnings) by year’s end wouldn’t surprise me. With rates coming down, more capital sitting on the sidelines will likely chase a name as exciting as NVDA, even at its current seemingly rich valuation.
Is NVDA Stock a Buy, Hold, or Sell?
There are 39 analysts offering price targets on NVDA stock via TipRanks, with a strong bullish consensus. Specifically, 36 analysts have rated the stock a Buy, two a Hold, and just one a Sell. At $219.26, NVDA’s average stock price target implies 16% upside over the next twelve months, meaning that Wall Street believes the stock’s rally is unlikely to fade in the near term.
AI’s Time Compression and the Road to $250 for Nvidia
The AI race is literally compressing calendar time. Azure’s first GB300 “factory,” sovereign approvals, and a pipeline of founder-led buyers all funnel demand toward Nvidia’s stack. We can see that the consensus is catching up, but it likely won’t be fast enough if this build-out stays hot. I am bullish and think $250 per share is less a hope than a waypoint on the road, especially if the GB300 era becomes, as Microsoft hinted, the first of many.